Morgan Stanley Beats Q3 Earnings Forecasts

by Christopher Freeburn | October 18, 2012 11:41 am

Morgan Stanley Beats Q3 Earnings Forecasts

Morgan Stanley (NYSE:MS[1]) announced on Thursday that it lost $1 billion during the third quarter[2] after taking a $2.3 billion charge related to accounting changes. Adjusted EPS, excluding the charge, came in at 35 cents, beating the 25 cents that analysts had expected, Bloomberg noted.

Excluding the accounting change, the bank posted quarterly revenue of $7.55 billion, up 18% from $6.4 billion in 2011.

Shares of Morgan Stanley dipped more than 1% in Thursday morning trading.

Company officials noted that its asset management unit saw revenue increase strongly compared to last year, while investment banking revenue jumped 21%. Its real estate investment unit also saw growth. Fixed-income sales rose to $1.46 billion, up 33% from last year, and topping the $1.2 billion predicted by analysts.

Revenue from business strategy and merger advisory and underwriting services declined, though bond underwriting revenue rose twofold over last year.

In June, Moody’s Investor Service cut the bank’s credit rating by two notches[3]. That was one notch less than analysts had expected. Morgan Stanley was one of 15 major banks whose credit ratings were trimmed by Moody’s.

Yesterday, Bank of America (NYSE:BAC[4]) announced that it broke even during the third-quarter[5], surprising analysts who had expected a small loss.

Endnotes:
  1. MS: http://studio-5.financialcontent.com/investplace/quote?Symbol=MS
  2. during the third quarter: http://www.bloomberg.com/news/2012-10-18/morgan-stanley-beats-estimates-on-rise-in-fixed-income-revenue.html
  3. cut the bank’s credit rating by two notches: http://investorplace.com/2012/06/moodys-downgrades-15-global-banks/
  4. BAC: http://studio-5.financialcontent.com/investplace/quote?Symbol=BAC
  5. broke even during the third-quarter: http://investorplace.com/2012/10/inside-bank-of-americas-mixed-bag/

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